Learning to drive is an exciting time for most 16-year-olds. When your teen driver gets their license, it’s important to make sure they’re fully insured to keep them protected on the road. Use this guide to learn the answer to the question, “How much is car insurance for a 16-year-old?” and other important information about insurance costs for teen drivers.
How Much Is Car Insurance for a 16-Year-Old Driver?
Typically, the cost to insure a 16-year-old driver is higher than drivers in other age groups. While the cost of auto insurance for 16-year-old drivers can vary, the average cost to insure these drivers is $3,343 per year, according to the financial website WalletHub. This cost may be more or less, depending on where the teen driver lives. Here’s a comparison of annual premiums for 16-year-old drivers in several states, according to WalletHub:
- California: $2,845
- Texas: $3,892
- New York: $7,305
- Pennsylvania: $2,093
- Illinois: $3,626
- North Carolina: $1,608
- Michigan: $6,508
Factors That Affect the Cost of Insurance for Teen Drivers
Many insurance companies consider 16-year-old drivers to be at high risk for accidents on the road. According to the Centers for Disease Control and Prevention, teen drivers between the ages of 16 and 19 have a higher risk of being involved in a motor vehicle crash than any other age group. New drivers in their first few months of licensure have an even higher risk. The crash rate per mile driven is 1.5 times higher for 16-year-old drivers than for 18- to 19-year-old drivers, according to the CDC.
In addition to the risk potential, there are other factors that can cause higher insurance costs for 16-year-old drivers. These factors include:
Driving Record
Many insurance companies set rates based on a person’s driving record, which includes past accidents and the number of claims filed. Most 16-year-old drivers have had their licenses for one year or less, which means they have no driving record. Since new drivers have no experience, and insurance companies can’t predict a newly licensed teen’s driving behavior, they often increase insurance premiums for these drivers until they have more data. Typically, a teen driver’s annual premium can decrease after they prove to be a safe and careful driver.
Location
Costs to insure a 16-year-old driver can differ widely between states. If a teen driver lives in a heavily populated state with more drivers, they may have higher insurance rates because the risk of being involved in an accident increases. In addition, auto insurance costs for teen drivers can vary between different areas of the same state. For example, if you live in a small town with fewer drivers, your 16-year-old driver may cost less to insure.
Vehicle Type
The type of vehicle a 16-year-old drives can affect the cost of their auto insurance. Typically, newer vehicles cost more to insure because insurance companies will have to pay more to replace the vehicle if gets totaled. The body style, trim level, and safety ratings of the vehicle can also factor into the cost of insurance. For example, a 16-year-old who drives a two-door sports car may cost more to insure than one who drives a four-door sedan with excellent safety ratings.
Ways To Save Money on Car Insurance for 16-Year-Old Drivers
Even though it may cost more to insure a 16-year-old driver, there are ways you can try to lower the cost of the annual premium. Here are some strategies to help you save money on car insurance for 16-year-old drivers:
Compare Quotes
Insurance companies can set different rates for 16-year-old drivers. Shop around and compare different quotes to help you find the most cost-effective option. Aim to get several quotes to help you make an accurate comparison. Once you have multiple quotes, review the different coverage types and costs to help you choose the right plan for your teen driver.
Encourage Safe Driving Habits
While a 16-year-old driver’s insurance rate may initially be high, your teen driver can help lower their annual premium by driving safely. Encourage safe driving habits for your teen driver by monitoring their driving closely. Allow them to practice driving while you’re in the vehicle to offer tips and advice. Practice in different conditions, such as rain or heavy traffic, so they become more comfortable driving in all situations. Last but not least, always make sure your teen driver wears their seat belt.
Ask About Discounts
Even though 16-year-olds are new drivers, insurance companies often offer discounts to help offset the cost of their premiums. Ask about any discounts your 16-year-old driver may be eligible to receive. Some common discounts for young drivers include:
- Good student: Insurers may offer this discount if a 16-year-old driver has good grades and meets a GPA threshold, such as a 3.0.
- Driving course: If a 16-year-old driver completes a driving course, they may be eligible for lower insurance rates. Companies may require proof of completion before granting the discount.
- Driving habits: Some insurance companies may offer lower insurance rates if a 16-year-old driver uses a driving tracker, which can show their safe driving habits. If the teen proves they can drive cautiously, insurers may lower their annual premium.
- Payment up front: Most insurance companies allow you to pay a lower premium amount if you pay all at once, rather than using a monthly payment plan.
Can You Add a 16-Year-Old Driver to an Existing Policy?
While 16-year-old drivers can get their own auto insurance policies, it’s often cheaper to add them to an existing policy. Typically, you can add a 16-year-old driver to your existing policy by contacting the company and providing some basic information. It’s also a good time to get quotes from different insurance companies to see if switching insurers may lower the cost of your premium. If a 16-year-old wants to get their own policy, they may need a parent or caregiver to cosign the agreement.
Now you know the answer to the question, “How much is car insurance for a 16-year-old?” and other valuable information about insurance costs for your teen driver. While it can be costly to insure a 16-year-old driver, there are ways you can lower these costs while helping your teen learn to be a safe driver.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
